Fidelity Bank sets priorities as shareholders get N4.6b dividends

Fidelity Bank Plc plans to focus on redesigning its systems and processes to enhance service delivery and deepen cost optimisation to ensure competitive returns to shareholders.

Acting Managing Director, Fidelity Bank Plc, Mr. Mohammed Balarabe, outlined the bank strategic focus in the 2016 business year at the annual general meeting in Lagos as shareholders approved distribution of N4.6 billion as cash dividends for the 2015 business year. Shareholders will receive a dividend per share of 16 kobo.

He outlined that the bank would pursue initiatives aimed at reducing operating expenses and cost-to-serve while enhancing it over all risk monitoring capacities to ensure both internal and external risks are identified and mitigated before they crystalise.

“On the back of the evolving dynamics in the industry, we will continue to increase the adoption and migration of customers to our digital platforms and increase our retail banking market share through innovative products and services,” Balarabe said.

He said the bank’s 2015 performance reflected the disciplined execution of the management’s medium term strategy and the resilience of evolving business models despite the extremely challenging business environment in 2015.

Key extracts of the audited report and accounts for the year ended December 31, 2015, showed that gross earnings grew to N146.9 billion in 2015 from N136.1 billion recorded in 2014. Profit after tax rose marginally to N13.9 billion in 2015 as against N13.8 billion in 2014.

He pointed out that the 2015 financial year was challenging due to the difficult operating environment, the tight monetary stance of the Central Bank of Nigeria (CBN), implementation of the Treasury Single Account (TSA) and currency devaluation concerns, which culminated in negative earnings headwinds in the banking industry.

According to him, even with the prevalent economic conditions, the performance of the bank showed resilience as it was able to achieve sustained growth through income stream built on qualitative services, innovative products and clear understanding of the varying needs of customers.

He said the bank would continue to focus on balance sheet optimisation, rebalancing of its loan portfolio in consonance with its medium term strategy and increased growth in retail deposit base.

In his address, chairman, Fidelity Bank Plc, Chief Christopher Ezeh explained that the tough business environment reflected more on the fees and commission income of the bank which dropped by 20.8 per cent to N23.3 billion from N29.4 billion due to regulatory restrictions on foreign exchange transactions.

“Despite the drop in fees and commission income, profit after tax grew by 0.8 per cent, which shows the resilience of the earnings base of the bank. Net interest income increased by 24.7 per cent to N60.9 billion on account of loan re-pricing and balance sheet optimisation towards higher yield sectors of the economy,” Ezeh said.

He pointed out that the bank improved the earnings capacity of its balance sheet even in the face of decline in fee income precipitated by a N10 billion reduction in its foreign exchange income.

“We continued to increase yields on earning assets faster than the growth in funding costs, which improved our net interest margin to 6.9 per cent in 2015,” Ezeh said.